MBS looks to rebuild business

Published 8:00 pm, Monday, July 26, 2004

A nationally known airport consultant doesn't see a big passenger influx at MBS International Airport anytime soon, but he recommends dialogue with Delta, ATA and Midwest airlines for future business.

Michael Boyd, in a report to the MBS International Airport Commission, said low-fare airlines have pushed Bishop International Airport well ahead of MBS, making the Flint airport the second-fastest growing in the country last year. While larger airlines such as Northwest sometimes match fares with the budget companies, their segmented approach to fares favors leisure travelers over business travelers because they impose restrictions such as Saturday stayovers and 14 or 21-day advance purchases.

MBS passenger numbers declined 5.6 percent from 2002 to 2003 and are down 23.4 percent from 2000. Bishop passenger numbers are up 31.4 percent in 2003 and 60.9 percent since 2000. Capital City Airport, another competitor with MBS, saw a 4.1 percent increase in 2003 but a decrease of18.2 percent since 2000.

MBS has two carriers - Northwest and United - taking passengers to three hub sites with 90 departures and a total of 7,438 seats available each week. Flint has six carriers, 10 hub sites, 243 departures weekly and 14,202 seats. Lansing has four carriers, five hub sites, 135 departures and 8,327 seats.

Boyd found Flint had lower average fares in 20 of the top 25 travel markets, while MBS had lower fares in three markets. Lansing was lower in two of those markets. Leisure fares generally were higher at MBS than at Flint. But Boyd believes MBS' higher fares might attract low-priced competitors. For example, if MBS could convince Delta to fly passengers to Cincinnati - now a hub for regional jet operation - fares probably wouldn't fall but it might create some "pricing discipline." Delta's joining a marketing alliance with Northwest and Continental might open up connections at MBS to Detroit.

Continental has said it would return to MBS if it could take The Dow Chemical Co.'s business travelers to and from Houston, Boyd noted, but Dow now flies its employees between those two points.

If Midwest Airlines and its partner, Skyway, were convinced to come to MBS, that move could open links to large cities such as Denver, Phoenix and Orlando.

MBS also might attract ATA for service to Chicago using turboprops, although Airport Manager Jeffrey Nagel noted ATA has cut its markets. ATA service wouldn't attract a large number of passengers, but might push Northwest to lower its prices, Boyd said.

Boyd recommends MBS continue talking to Northwest in hopes the airline will lower fares to match Flint's. He suggests Northwest could lower a selected group of fares for three months and see how that affects revenue. Northwest is expected to expand service in the next two years, and that could add capacity at MBS to Detroit.

The information in the report was "about what I had expected," Nagel said. The report lays out updated information and a direction for MBS to proceed.

Nagel would not talk specifics, but he said talks with Northwest and United continue. He stresses the idea that MBS should work with its current carriers first and foremost.

Costs compared

Here are comparisons of the average cost for a one-way flight to major destinations based on Michael Boyds analysis made this spring.